The fact that knowledge management (KM) surfaced as a separate discipline does not mean that knowledge(-development) until then played no role in corporate life, but merely that before it had been the almost exclusive domain of R&D departments, or a to a certain extent unintended by-product of existing working processes.

KM explicitly moves the conscious use of mechanisms of knowledge (re) use, sharing and acquisition to the centre of the stage. Roughly three waves, or currents depending on whether one emphasizes the chronological appearance or ifference in approach, in KM can be distinguished.

The first wave typically tried to assist decision making by presenting already existing information at the right time. The second wave, that started about 1995 with Nonaka’s model of tacit and explicit knowledge, focused on the tacit-to-explicit conversion of knowledge residing in people’s heads. The third most recent wave, discernable for the last year or two, leaves knowledge in the heads of people, and instead pays attention to what organisations can do to give people the opportunity to deploy their creativity and experience to the full (benefit of the organisation).

With this third wave focus in KM is shifting from knowledge use to knowledge creation, from the ability to produce to the ability to change, from organisations to the people within the organisation, and from command and control management styles to facilitating and providing guidelines and context.

Questions
If organisations are now advised to seek the biggest added value in the ability to mobilise the creativity and experience of their people, what then are important factors in doing so?

Sveiby proposes intangible assets as a means to bring to light the sources of added value of an organisation. Knowledge management then is the attempt to increase these intangible assets, just as classic management attempts increasing the tangible ones.

He names three categories of intangible assets; internal structures (such as organisational form, QA systems, organisational culture, internal communication lines and relationships) external structures (e.g. brands, corporate reputation with customers and society, knowledge of clients visions and desires etc.) and competences (the ability to act) of the individuals within the organisation.

Additionally it is through competences that both internal and external structures come into existence. Especially it’s the individual’s ability to engage in relationships with others that creates internal and external structures.

What is it that’s at the heart of any good relationship? Mutual trust, is the answer that comes up in many discussions amongst KM-professionals. How directly the link between trust and the value (of intangibles of an) organisation can be is aptly demonstrated with the collapse of Andersen, where the loss of trust in the wake of the Enron scandal in only a matter of days led to the downfall of this world wide corporation.

Therefore there are four questions that present themselves for analysis. First of all, what is trust? Second, how does trust evolve between individuals? Third, what is the connection between trust in personal relationships and trust in organisations? And fourth, how is trust converted in added value for the organisation? With the answers to these four questions one can try to answer the question that is the bottom line for knowledge management: what should an organisation do and not do regarding trust?

Analysis
What is trust? Trust is what you need when one tries to come to a decision or make a choice when there is no absolute certainty about the outcome or consequences of this choice. Something that’s more often than not the case. With trust insecurities in choices are compensated.

Different assessments of risks come into play here, like the size of the insecurity (how big is the chance that my choice proves to be wrong), the value of what is at stake (what will it cost me if I make the wrong choice), and the value of what is to be achieved (what are the potential rewards of my choice). A lottery is a good example of this. Usually the price of tickets is low (low investment), and by paying a little extra one can also play for the jackpot (which is generally substantially larger than the first prize) against even lower odds. The bigger possible reward is used as an enticement to raise your investment, and disregard the very high uncertainty of actually winning the jackpot.

Trust is the jump, the leap of faith, over the uncertainties involved in making choices. Trust therefore is not a thing, or an emotion like anger or happiness, it is an action, something you do each time you make a decision. From our choices, and the actions they bring forth, our trust becomes visible.

So if trust is an ingredient of making choices, and the actions based on these choices make trust visible to others, what does this say about relationships with other individuals? First there are choices to make. For instance there are two ways of trying to build a trustful relationship.

The first way is creating oneself in the others image, conforming to the others desires and wishes in the hope of being trusted. This probably only works until the other finds out, and in essence does not provide any mutual trust, only one way trust, since the other is not trusted with the real personality of the one.

The second way, and in my opinion the wisest way, is taking yourself as point of reference. This implies a good understanding of one’s own motives, needs and wants, but it also promises more certainty about one’s own position and thus decreases the uncertainty in the decision how to engage in a relation.

More fundamental however is the question if it is ethical to start (or break off) a relationship without consciously making the choice to do so. The question if such a choice should not explicitly be made first, before making any choices on how to form a relationship, let alone what to do in such a relationship. Heidegger made conscious choice making the fundament of true individuality and self-fulfilment. Self-knowledge and conscious choice thus seem to go hand in hand, and are both likely prerequisites for trustful relationships.

Once the choice is made it is time to act. The earlier analysis of what trust is gives clues as to what type of actions help to establish trustful relationships. These are actions that show trust, in other words show your own investment in the relationship, actions that try to diminish the uncertainties of the other, and actions aimed at increasing the rewards for the other. These are all actions that, by showing your commitment, invite the other to trust you in return.

Examples of such actions are, respectively, keeping promises, revealing background and reputation and being prepared to talk about differences, and thinking along with the other, or unexpectedly fulfilling needs (“I came across this article yesterday, that I think will interest you very much”).

The degree of mutuality of these actions then is directly proportional to the degree of mutual trust. This mutuality is the balance between giving and taking, or better, giving and being given. (Taking in this context is being given without giving)

In relations where there is no such balance other factors should be at play to keep the relationship in existence, like power and dependency or hidden agenda’s and rewards. The aim of such relationships lies probably not in the contact with the other, but somewhere outside the other, by which the other becomes a means toward an end.

This directly touches on Immanuel Kant’s definition of respect (respect is treating a person as an end in itself, not as a means towards an end), and what type of relationships, namely unbalanced ones, Machiavelli advises to those who want to obtain and hold on to power, for the sake of power itself. In these last observations a lot is contained about what sort of actions destroy trust and create distrust. Later, when talking about the role of organisations in creating trust, I’ll expand on this.

With the nature of trust and its place in personal relationships established, we get to the link between the personal and the organisation. Earlier it was stated that organisations are groups of individuals. Individuals that engage individually and with others into relationships with each other and with other individuals outside the organisation. Organisations therefore can be viewed as clusters of internal and external relationships between individuals.

This view suggests a strong interaction between the personal and the organisation. The organisation is the aggregation level of all the individual relationships it encompasses. The trust an organisation as a whole enjoys for instance now can be seen as the sum of the reputations of all individual relationships built in the past. The downfall of Andersen can then be explained from some non-mutual trusting relationships hiding behind the reputation of other relations that were mutual and trustful. That is precisely the pattern con-men use and also is used in the street game where you have to guess under which cup the ball is. Likewise the way in which organisations can acquire knowledge, e.g. concerning threats and opportunities, from its environment (clients, suppliers, collegial and branch networks) correlates to the quality of the relationships that individuals within the organisation have with that environment.

This makes phrases like “being in touch with target-audiences” and “communicating with market-segments”, except perhaps in internal reports, useless. Useless because of the conclusion that it has to be about trustful contacts with individuals. The “Cluetrain Manifesto” hence proposes that “markets are conversations”, emphasizing the personal character of contact with customers, between customers, and with competitors. In the light of this article this does not sound strange, but in 1999 it did make waves in the marketing world.

The idea of organisations as clusters of individual relationships also has impact on the organisation itself. What messages are organisational structures, reward systems, and decision making methods, conveying to people in the organisation about the trust that apparently (sic!) has been placed in them by their managers? What is the influence of powerlevels on the mutuality of the relationships for instance between board members and middle management, and what does this say about the quality of information exchange between them that you may expect?

What do we find if we examine where creative ideas and new insights come into existence? Mostly not in meeting rooms or on demand, but by connecting the dots between things inside and outside the organisation, private and business, and especially in conversations with other people. People with whom enough trust has to be shared to be sure that your half-ripe ideas and hunches won’t be ridiculed, or that someone else takes credit for your ideas. Trustful relationships are needed, along with the room and the time to explore uncharted side-roads. The question therefore is whether the organisation, through its form, encourages or discourages the forming of trustful relationships. The question behind that first question is whether the encouragement or discouragement is the result of consciously made choices, or that it is an unintended by-product of other processes.

The last step in this little analysis is looking at the connection between trust and added value for the organisation. Until now it has been argued how actions of individuals influence the existence of trustful relationships, and also how organisations as clusters of relationships through their form influence the relationships it contains and the trust that is involved in them. Also it is argued that the sharing of knowledge, creativity and the creation of new insights primarily take place in relations between individuals, on the condition that mutual trust exists in those relations. How can we trace the effects of trust in added value for the organisation?

At the start of this article three categories of intangible assets were named, to provide insight in added value. These three categories were: internal structures, external structures, and competences. The relationship between internal structures and trust has already been established. The organisational structure determines the degree to which people can place trust into their internal relationships, and that in its turn determines the way people can live up to their potential.

The many employee satisfaction surveys that show how many employees have the feeling that they cannot give their best, because of organisational restraints such as lacking leadership and failing communication lines, provide an indication of how much there is left to be gained in this area.

The reputation and the possibilities, to import knowledge from outside, organisations have is based on the cummulation of individual contacts between people inside and outside the organisation, with mutual trust as a measure of the value of these contacts. If the position of an organisation is thus dependant on the quality of the relations with individuals outside the organisation, the deliberate chosing, getting into, and breaking off of relationships in no small way determines the face of the organisation to the outside world.

Competences in this article have been defined as the ability to act. This implies that if an organisations places value on competences, it has to also provide room for its individuals to act. With the ability to obtain new competences and the space to use them, the ability to change of the organisation as a whole is determined. The fact that competences are primarily connected to human individuals, and that the creation of new competences depends on the trust available in the relationships of these people with others suggest a directly proportional connection between trust and the compentence-level of an organisation. For all forms of intangible assets therefore trust, through personal relationships, has an important impact on the level of added value an organisation can attain with its activities.

What is now accomplished?
With the analysis of the four questions that surfaced upon first inspection of the role of trust in KM, an attempt was made to gain insight into the interdependency between trust, individuals, personal relationships, and the functioning of organisations. Also I hope to have separated these different levels clear enough, to provide a useful framework for further discussions.

All contributions to the discussion on trust, can now be evaluated as to what level of the framework they address, thus hopefully diminishing the confusion that comes with trying to address all aspects at once.

By defining an organisation as a cluster of personal relationships I intend to make it possible to apply this framework to other organisations than only a corporation, even though much of this was written with a corporation in mind. Other possible forms of organisations could include departments, communities of practice (both virtual and irl), not-for-profit organisations, or even social networks.

The underlying layers (trust, individuals, personal relations) of all these clusters are the same, so that actions taken by these organisations to foster trust solely depend on the specifics of the aggregation of personal relationships the organisation constitutes.
It is now possible to either focus on actions, with the principles as given, or focus on the principles with the deduction of plausible actions at a later stage.

This leaves us in this article with the fifth question that was formulated at the beginning: what should an organisation do and not do regarding trust?

Consequences for action
The organisation as a cluster of relationships is the starting point of this exercise. If an organisation is the aggregation level of all relationships that exist within its scope, then the organisation should make sure that all these relationships have a good chance to enhance each other and not cancel each other out. This can be done by applying what we know of the personal level to the organisational level, and vice versa. In other words organisations have to make the personal into an organisational issue, and the organisational into a personal issue.

What does this mean in practical terms? First an organisation has to deal with the principal factors of self knowledge and making choices, that were mentioned when personal relationships were discussed. What is it that makes the organisation unique, or at least clearly distinguishable as a separate entity? What is its longterm vision, what role does it intend to play in society, what are its principles and what aren’t? Does the organisation lack such a self-descriptive identity and is its only purpose turning a profit, is every decision made only for opportunistic reasons? Or does an identity exist, based on a package of principles, points of reference, strategic perceptions, and corporate ethics, that lets the organisation define itself and take part in its surroundings on the basis of that self image?

This article argues for the necessity of the latter, because self knowledge is the basis on which good relationships can be built. This self knowledge then forms the input for the second principle, making choices. Choices which relations to enter into, with possible employees, and with customers and others. This choice needs to be based on the (long term) needs of the organisation, and that implies knowledge of these needs, which in turn presupposes self knowledge and the ability to reflect on itself. Examples of such companies according to Adam Morgan’s “Eating the Big Fish”, are Diesel and Swatch. They don’t decide on their course relative to their customers, but relative to themselves. They are their own lighthouse.

Consciously making such relational choices based on self knowledge has a big impact. It means for instance doing away with the “customer is king”-approach, that defines the organisation as a servant to the customer, because it eats away at the thought that relationships should be mutual and balanced. Therefore it is important to get to know the customer very well, his identity, his needs, in order to be able to spot the win-win situations in which to create your added value.

The same goes for relationships the organisation is entering into with its employees. In the light of this article employees cannot be viewed as a means of production, as a cost. On the contrary, they have become the primary source of revenue, because it’s the quality of their relationships that determines the succes of the organisation. The self referential identity, and the choices that are based on it, especially concerning the needed types of relationships, have to be communicated actively, pervasively, and continually, by word, but also and more important by action. And this has to be done both internally and externally.

The actions that help create trustful mutual relationships between individuals fell into three categories: actions that convey trust, i.e. your own commitment, actions that reduce the uncertainties for the other, and actions that increase the possible benefits for the other. These are all pro-active, with self knowledge as a frame of reference.

Additionally mutuality is required, which means that there should be no interfering factors entering into a relationship, like power differences and hidden agendas.

The potential consequences for many organisations are enormous. Three easily spotted areas are the unlearning of using power differences in relationships, the consequent combination of responsibilities and the authority to decide, and the role of measurements. All three are often named hang ups in both KM and QA-systems.

Lots of organisations know situations where power is used in machiavellistic ways (aptly persiflaged in the animation series Dinosaurs featuring a company “We say so”), meaning that often power is wielded not to help the organisation on its way to its goals, but for the sake of wielding power itself. This is hugely destructive in situations where decisions could have been reached, and therefore should have been reached, without the use of power. It totally destroys mutuality in relations, it leads to covering up differences of opinion, to keeping to the beaten tracks, and in the end degrades the less powerfull one in a relationship to a kind of serfdom. These become the wageslaves, which Mick Cope aims to empower with his book on personal knowledge management (www.wizoz.co.uk).

Managers should not hide behind the door of the boardroom, but should be willing to enter into real conversations with their people. Such managers are no longer commanding officers, but facilitators of the workplace.

The combination of responsibilities and the authority to
decide (meaning giving up power by those higher up in the hierarchy) creates room for individual employees to do their work to the best of their ability, and not to the best of the instructions they’re issued. This means that when you give someone the responsibility for how he spends his time, you also have to make sure that his agenda is not filled by others, but by the person itself.

Or if you hold hospital boards responsible for the length of their waitinglists, it should also be them to decide on the size of staff, and the number of operations to perform. In this manner you as it were place ownership of a problem or decision to make on the basis of the nature of this problem or decision. This in contrast to appointing someone to make decisions, the classical role for managers, and then make him owner of all problems because he’s the one that may decide.

Measurements and reward systems based on them also need to be adjusted in this sense. Often measurements lead to distruction of trust because the measurement becomes more important than what was measurement, rewards start rewarding the wrong behaviour.

In this years Reith Lectures, Onora O’Neill explores the relation between measurements and creating distrust. (www.bbc.co.uk/radio4/reith2002/) Why is a measurement taken, and especially, for whom? Is it the purpose of sales bonuses to reward turnover, or to reward the likely lifespan and quality of newly acquired customer relationships? Is a university rewarding knowledge creation on the basis of the number of publications, or on the basis of re-use (number of quotes) of those publications outside the university? This is a step away from rigid command and control measurement systems, towards a system built to observe and learn. The difference is illustrated by a metaphor I often use. You can make sure where a horse is by saddling it and riding on its back all the time, or by putting it in a green pasture with a fence. Maintaining a fence takes a lot less energy than riding a horse, and leaves both the horse and the horseman with more space and time to do what they think necessary. Command and control equals being in the saddle 24/7, selfknowledge and conscious choise making equals the fence, on which you can sit to observe and learn. And you’ll have to trust the horse not to jump the fence.

All suggestions in this last section try to make the personal a matter of the entire organisation, and the organisation personal to all its individuals. This means that organisations should act like persons in relations, and people within it should not hide behind the mask of the organisation. The interaction between these two levels is the motor that drives the organisation onward. Therefore it’s the challenge to modern day organisations to remove the somewhat cynical undertone from the title of this text, and turn it into a widely accepted credo: Trust me! I know exactly what I’m doing.

Post scriptum
While writing this article I have used the input in and reactions to discussions about trust on the fora of www.knowledgeboard.com and www.brint.com, that were triggered by the article by John Moore (http://www.roundourhouse.com) titled “The Value of Trust” (http://www.knowledgeboard.com/item/86659).

This article is an attempt at synthesis of what has been brought forward in these discussions, and in that sense does not claim to be an original work. It does claim however to be part of a good conversation. Also this article is meant as a starting point for further discussion, and aims to provide a frame work in which the different threads of the discussion can be placed. The reader therefore is wholeheartedly invited to react and participate, either in the fora mentioned or by sending e-mail to a.zijlstra@io-research.nl

This article will also be published in the September/October 2002 issue of “Tok”, the faculty journal of Philosophy of Science and Technology at Twente University (www.utwente.nl), in dutch.

The author works as knowledge manager with I&O Research, and is also a student of Philosophy of Science and Technology at Twente University